Wednesday, April 06, 2005

China Faces Labor Shortage

Who'd have thought it? A country with a billion-odd people -- the world's most populous -- is experiencing labor shortages in its industrialized Guangdong and Fujian provinces.

Whereas busloads of prospective workers used to trek to these regions in search of jobs, factories must now actively recruit. Workers are also leaving the cramped, squalid conditions of Guangdong. Those who are staying put are striking to assert their rights.

Those studying the phenomenon believe that this is only the start of a long-term trend. "The number of people in the labor force is going to be going down for the next 15 years," says Dali Yang of the University of Chicago. "This is a shift in demographics that is really good, not just for salaries but for work conditions."

A flattening population and China's rising standard of living -- which gives workers more employment options and raises expectations -- seems to be at the heart of the shortage. Chinese workers also have tools long familiar to their Western counterparts, particularly employment websites.

Of course, higher wages will also mean higher production costs. And higher production costs will mean that China will no longer be the low-cost production giant... which would affect everyone in the US from Wal-Mart to Wall Street.

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